Private Sector Development in Agriculture

More than 70 % of Kenya's population lives in rural areas; many of them below the absolute poverty line. The agricultural sector is still the mainstay of Kenya's economy; its contribution to the gross domestic product amounts up to more than 25 %. In rural areas, agriculture is often the sole provider of employment opportunities. Its potential, however, ist still underused due to unfavourable framework conditions for the private sector, insufficient service delivery and overuse of natural resources.

Kenyan-German Development Cooperation with its focus on support to private sector development in agriculture contributes significantly to better exploit the agricultural potential. In particular, value creation along the chain (production, processing, marketing) of various products like potatoes, dairy goats, omena fish and mangoes are supported, small-scale irrigation and rural infrastructure is improved. The programme objective is support small and medium agricultural enterprises to better use their market opportunities and thus increase value addition in rural areas.

Beside the interventions in value chain development and policy advise the programme's focus is on strengthening of self-help groups and support private sector associations to stronger articulate their interests. In this respect, support to smaller projects, which would have otherwise no chance of realisation, is also possible.

Up to now, 50,000 households have been reached by promotion of the value chain approach. Half of them could increase their income from 12,000 Kenyan Shillings to 15,000 Kshs. per year amounting to a total of additional 750 million Kshs. per year. Also about 5,000 additional jobs were created. The impact of dissemination of energy saving stoves has been much more impressive and spectacular indeed, where the programme reached about 560,000 households which are now saving firewood with an economic value of 2,5 billion Kshs. per year. At the same time nearly 1,000 additional rural jobs were created.

For the current phase the government of the Federal Republic of Germany has made available a total amount of approx. 40 Mio EUR.